£ in and out of cash isa

colsten

pavane wrote: »

Usual suspects on this forum will always rubbish ISA, if you are putting away for longer term when rates will rise it makes sense.

Putting money away for the longer term (5+ years) in a cash ISA makes little sense for the vast majority of people.

Putting money into a cash ISA for less than 5 years also makes little sense for the vast majority of people.

Bottom line is that cash ISAs make little sense for the vast majority of people.

jimjames

pavane wrote: »

It is not so much hoops, those accounts also have limits or mature, but that ISA allowance is use it or lose it. Usual suspects on this forum will always rubbish ISA, if you are putting away for longer term when rates will rise it makes sense.

When exactly do you think rates will rise? 5 years, 10 years? I think the rates by 2020 will be little different to now. Over that length of time a cash ISA is definitely not the place to have the majority of your savings. These so called "short term" high non ISA rates have already been around for nearly 4 years. That's a lot of money to waste in the forlorn hope that an ISA rate might increase.

If you have £100k in cash ISAs then think carefully before removing it. If you have £10k then to me it's a no brainer as you can easily replace it in one tax year. For long term then you probably should be looking at S&S ISAs not cash anyway.

This forum is about saving and making the most of your money. Why would anyone promote an account offering 0.5% when you can get 5% on the same money?

G_M

What happens at (tax)year end?

If you top up your ISA, say, in 2015-16, then withdraw, say, half of it, can you replace that half in 2016-17 as well as topping up with the full 2016-17 allowance?

One reason for an ISA over other savings might be the long-term benefits, but these would not apply if you withdraw and lose the allowance.

jimjames wrote: »

If you have £10k of savings then the limit is irrelevant. If ISA rates do ever increase then you can plonk it straight back in as you have a new allowance come April. The allowance is £15240 EVERY year so after 10 years you could put £152400 in - how many people have that sort of savings.

Mine was a general query about the process. Nowhere did I say 10K savings. But if you want figures:

* 2015-16. subscribe £15240
* 2015-16. withdraw £5000
* 2016 - 17. Have £20240 spare cash.

Can I use the previous year's withdrawn £5k in addition to the new £15250 allowance and subscribe £20240?

colsten

G_M wrote: »

Nowhere did I say 10K savings.

other people did ask about £10K, and any response quoting £10K was to them. You shouldn't be guided by suggestions for people with £10,000 if you have a different sum of money to handle.

G_M wrote: »

* 2015-16. subscribe £15240
* 2015-16. withdraw £5000
* 2016 - 17. Have £20240 spare cash.

Your annual ISA allowance this year and next will be £15,240 each. There will be some change to deposits and withdrawals coming in 2016-17 but the details of those are very scant at present. You never could carry over any unused ISA allowance to a new tax year, and I doubt you ever will be able to.

Your example suggests you have more than the ISA allowance available in 2016-7. That's no different to having had more than the ISA allowance in any previous years. You just got to find a different place for your spare cash.

The basic premise remains as per many, many previous posts: there are many accounts that pay better interest than cash ISAs. "Tax free" doesn't always mean "better deal".

jimjames

G_M wrote: »

Can I use the previous year's withdrawn £5k in addition to the new £15250 allowance and subscribe £20240?

No. The annual allowance is £15240. So if you have more than that then you'll need to put it in an ISA over 2 tax years. Really not a problem though unless you have serious amounts of cash in ISAs and in that case I'd question whether you really need to hold all as cash. If income is most important then you may want to put some into S&S ISA investments paying 4%. If maximum short term savings for a house deposit is your target then an ISA isn't really relevant for long term tax advantages.